Cattle futures gained strength late in yesterday’s session, albeit amid light pre-holiday trade. Support included chatter that beef packers appear to be short-bought and may have to advance cash prices this week.
Feeder Cattle futures closed an average of $2.40 higher.
Live Cattle futures closed an average of 98¢ higher (45¢ to $1.57 higher).
Negotiated cash fed cattle trade ranged from slow on light demand to a standstill through Wednesday afternoon, according to the Agricultural Marketing Service.
Although too few to trend, there were some FOB live sales at $170/cwt. in the western Corn Belt, and a few dressed delivered sales in Nebraska at $270.
Last week, FOB live prices were $170/cwt. in the Southern Plains, $168 in Nebraska and $167-$169 in the western Corn Belt. Dressed delivered prices were $267-$268 in Nebraska and $267 in the western Corn Belt.
Choice boxed beef cutout value was 30¢ higher Wednesday afternoon at $289.13/cwt. Select was $1.56 lower at $261.60/cwt.
Corn futures closed 1¢ to 3¢ lower through Jly ’25 and then mostly fractionally lower.
KC HRW Wheat futures closed 9¢ to 16¢ lower.
Soybean futures closed 4¢ to 7¢ lower.
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Major U.S. financial indices closed lower Wednesday on likely profit taking.
The Dow Jones Industrial Average closed 475 points lower. The S&P 500 closed 70 points lower. The NASDAQ was down 225 points.
West Texas Intermediate Crude Oil futures (CME) closed little changed through the front six contracts.
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Although there is no clear bottoming pattern in Cattle futures, from a technical standpoint, Stephen Koontz, agricultural economist at Colorado State University notes the downtrend appears to be weakening.
“Cash prices for fed and feeder cattle did not have the same strength during the up move as futures did and are weakening but also not with the same strength as futures,” Koontz explains in the most recent issue of In the Cattle Markets from the Livestock Marketing Information Center. “Regardless, 2023 is finishing up the year offering a case study of proper risk management practices and perspective. Before mid-September, there was nothing but optimism and higher – record high – prices. And after mid-September, it was the opposite during the sharp decline. Producers that purchased LRP or hedged in the third quarter of this year will realize some of those excellent returns.”
On the other end of the supply chain, Koontz explains consumer beef demand remains relatively strong but moderated in 2023. He adds that further moderation in 2024 will impact beef prices.
“The demand side will likely have important interactions with changes in supplies as cattle producers consider and eventually commit to herd building,” Koontz says.